How many types of Annuities are there?
Retirement is something that is often on a person’s mind, particularly as they come towards the end of their working career. Investing for the future is a big consideration that most people make, but what many people don’t realise is that regardless of how hard they save throughout their career, one poor annuity decision can mean the loss of thousands of pounds each year and that’s why it’s crucial that when a person is deciding on an annuity, they really explore all of the options that are available to them.
What are some common examples of Annuities?
There are so many different types of annuities that are available on the market it can be hard to choose which one is right for you, but some of the most common examples that you may choose from include:
- Standard Annuities – a standard annuity is one of the most basic packages that you can have. Primarily dependant on your life expectancy, a standard annuity pays you a consistent income each month, year on year until your death
- Single Life Annuities – single life annuities are designed specifically for individuals and are designed to give an income directly related to the life expectancy and personal situation of that individual
- Joint Life Annuities – joint life annuities are designed to provide an annuity income for couples and can provide the reassurance that if one partner were to die unexpectedly, the other would still be provided for through an annuity income
- Enhanced Life Annuities – these annuities are designed for people who may have long term or terminal health issues which can serious impair their life expectancy. As a result they may receive a higher annuity income
- Inflation-linked Annuities – many people like to ensure that they are not caught out by inflation and as a result they choose to purchase an inflation-linked annuity which, although it might start with a lower premium, will continue to grow with inflation.
How can I decide between Annuities?
Deciding which annuity is best for you can be a difficult decision, and it’s not one that you want to take lightly. Seeking advice from an annuity specialist and taking the time to shop around and find what plan is best for you are two good ways of ensuring that you don’t miss the boat when it comes to choosing the right annuity.